At no point in recent history have calls for Africa to grow its economies been stronger. Across the continent, economic growth is arguably the most talked-about subject among policymakers.
So why has action on the ground failed to move the needle on this important development marker?
Economic growth has been a campaign promise across the African continent, with its acknowledged ability to bring prosperity, new jobs and better incomes for all.
Yet the continent is still struggling to develop its economy, experts confirm.
Experts warn that Africa’s manufacturing industry is likely to remain small throughout the remainder of these coming years if no immediate interventions are made.
Experts say that high commodity prices triggered by foreign markets seemingly insatiable appetite for natural resources have fueled rapid economic growth in Africa since the 1990s.
Adding that many thought the boom would revive Africa’s waning manufacturing industry. Yet to the dismay of analysts, it failed to live up to expectations.
Had African leaders heeded advice from experts and pumped profits from the commodity boom into stimulating manufacturing companies, the results could have been different. So what are the options for Africa over these coming years?
At the recent KUSI IDEAS meeting, big names like Raila Odinga the African Union infrastructure representative in Africa and Dr. Agnes Kalibata the President of the Alliance for Green Revolution in Africa weighed in on value addition as a significant thing for the African economy.
Experts unanimously conclude that the only viable option is to add value to products and provide transport and production of African goods.
Experts agree that one of the main reasons for Africa’s slow economic growth is that its producers have failed to add value to products before exporting.
The experts said that whenever we export processed goods, we create jobs for the youth and add value to local economies as opposed to spending it abroad. That is what they termed moving slowly but deliberately.
For instance, they said its better for Africa to learn how to export copper cables instead of copper and aluminum sheets
“Let’s start thinking in terms of value addition in Africa. We make coffee, it’s great, we export coffee, it’s great, but we need to figure out how we add value to what we produce. We cannot take unprocessed products to the market and expect high profit,” said Eric Chinje, a former World Bank Senior Manager during an interview with Business Times.
According to Kalibata, Africa imports every year $35 billion worth of food which is projected to rise to $110B in coming years if nothing is done to add value to our exports and decrease exports.
Transportation and logistics development for Africa’s industries could be responsible for lifting the region’s economies out of poverty, according to Raila Odinga, the High Representative for Infrastructure Development at African Union Commission.
“Opening the interior of free continental trade is by setting policy that creates transportation facilities for market-based products movement that creates jobs,” he said
This, a former senior World Bank manager is quick to clarify to the Business Times, is “an argument for a heavy-handed approach that would bridge productivity and smooth movement’’.
Alluding to one of the lessons from his experience, Raila added: “Markets must work for governments and should look for a way to connect so as to have a role to play in that inclusive trade.”
China sells its products affordably globally because they are not charged any transport fees.
Furthermore, 95 per cent of products transportation is by water with some countries taking advantage to charge transportation fees which consequently makes African traders raise product costs.